Financing a Property Mortgage Interest Development

Mortgage Interest Development

Our forecasts are valuable tools for selecting mortgage models and terms. You can have our mortgage interest forecast sent to you quarterly by newsletter.

Source: Credit Suisse, Datastream. Last data point: 09.04.2018

First Interest Rate Hike Expected in 2019

The Swiss economy is running smoothly again. We expect the economy to grow by 2.2% overall in 2018. The most important growth driver is the extremely dynamic global economy. In addition, the weaker Swiss franc versus the euro is acting as a boon for Swiss companies. Inflation remains in check for now. Long-term, however, the Swiss National Bank expects a rise to above its inflation target – meaning the time for monetary tightening is approaching. Provided the economic situation in the euro zone does not deteriorate unexpectedly again, we expect an initial rise in key rates from –0.75% to –0.5% in March 2019.
Since LIBOR remains in negative territory despite expectations of an increase, interest rates for Flex rollover mortgages are unlikely to rise in the next 12 months either and will persist at low levels. By contrast, interest rates for Fix mortgages with a medium and long term are likely to increase further in the coming 12 months, rising by 30 to 50 basis points in total. Even though Fix mortgage interest rates remain low by historical standards, they are definitely picking up. As in the past, upward and downward spikes must be expected going forward.

  Interest rate
Forecasts for
  09.04.2018 3 mths 6 mths 12 mths
Flex rollover mortgage1
1.17% 1.17% 1.17% 1.17%
Fix mortgage (3 years)2
1.23% 1.25% 1.25% 1.25%
Fix mortgage (5 years)2
1.28% 1.35% 1.45% 1.60%
Fix mortgage (10 years)2
1.63% 1.85% 1.95% 2.10%
Fix mortgage (15 years)2
2.03% 2.25% 2.35% 2.50%

The interest rates listed are indicative values and apply to top-quality residential property and borrowers with impeccable creditworthiness.

1 Flex rollover mortgage (framework term three years). Interest rate based on three-month CHF LIBOR. Interest rate adjusted every three months.
2 Fix mortgages. Fixed term and interest rate for the entire term.